The report finds that while UK banks have become more resilient institutions based on prudential measures, both employee and ethical results are still negative. This is indicative of a low consumer trust. However, can investors trust these banking giants?

I’d say yes. But first, let’s look at why consumers don’t trust them.

One of the ways to assess the progress of these lenders in terms of gaining consumers’ trust is by looking into financial ombudsman’s complaints data. If for nothing else, this data is useful because it reflects how effective a bank’s internal complaints handling system is.

Lloyds

In the first half of 2014, the financial ombudsman received 62,132 new complaints about Lloyds Banking Group, accounting for 32.5% of the total complaints received by the ombudsman during the same period. Of course, this should not be surprising considering the number of institutions under the Lloyds umbrella. However, considering that this lender’s 15,233 new complaints in the first half of 2009 accounted for just 21.8% of the total new complaints made to the ombudsman, it doesn’t look as if Lloyds has an effective complaint handling regime in place.

Another indicator that customer relationships aren’t improving at Lloyds is that in the first half of 2014, 66% of complaints were resolved in favour of the complainant, compared with 51% in the first half of 2009.

Barclays

In the first half of 2014, Barclays had 27,487 new complaints. Of these complaints, 66% were resolved in favour of the complainant. By comparison, in the first half 2009, there were only 9,056 complaints about Barclays, with 62.2% of them resolved in favour of the complainant.

However, from the data available to us, it is safe to deduce that there are some improvements with customer relationship at Barclays. Here’s why. Barclay’s complaints in the first half 2009 were 13% of the total complaints reported by the ombudsman. However, in the first half of 2014, that figure was only 14.4% — an increase of just over one percentage point. I would attribute the increase here to the growth in customer base that the company has had between H1 2009 and H1 2014.

HSBC

In the first half of 2014, 13,240 complaints about HSBC were submitted to the ombudsman. The lender was one of the worst performing banks, with 78% of the complaints resolved in favour of the complainant. By way of comparison, in the first half of 2009, HSBC had 2,969 complaints, with 68.3% resolved in favour of the complainant.

In addition, HSBC’s contribution to total complaints in the first half of 2014 was approximately 7%, compared to 4.3% in the first half of 2009. Based on that, I don’t think it’d  be wrong to say that HSBC’s customer relationship isn’t improving.

While there are other data between the first half of 2009 and the first half of 2014, the point here is to show you how these companies have improved five years on from the beginning of 2009 when many customers were still frustrated due to the financial crisis.

Foolish Takeaway

While customer complaints won’t directly affect the financial results of these companies, it is important to keep tabs on how bankers are handling their customers, as it could be helpful in knowing how banks are viewed by consumers, which could, in turn, influence customer acquisition over the long-term.

Overall though, with the efforts that the managements of these three companies have made over the last few years — which is being reflected in their financial figures — I don’t think investors should panic on account of this report, even though it says there isn’t much improvement. If you’re investing for the long-term, the good structures that these banks have built should convince you to stick with them.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has recommended HSBC Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

This suggests a sharp drop in investors’ confidence towards the future of the company, considering that Ms Green was the woman credited for its survival. However, does her departure translate to crisis for Thomas Cook?

Certainly not. Here’s why.

The rise of another effective CEO

As Ms Green stepped down as CEO, Peter Fankhauser immediately replaced her. While Ms Green is the person who oversaw the turnaround of Thomas Cook in general, Mr. Fankhauser has been highly instrumental to the entire process. Most notably, he oversaw the turnaround of the company’s UK business. His efforts in UK were in addition to overseeing the company’s Continental Europe segment, which also saw an improvement during his time.

Before we dig into the specifics of what he achieved while in charge of the UK business, let’s take a moment to examine just how important the UK business is to the company. In 2013, the UK segment brought in £2.977 billion in revenues, accounting for about 30.6 percent of total revenue. The only segment that brought in more revenue was the Continental Europe segment, which consists of more countries than the UK. That’s just to show you how important the segment that was entrusted to Mr. Fankhauser is to Thomas Cook.

Effective at meeting targets

Mr. Fankhauser took over as the CEO of the UK segment in 2012 and did well to achieve the following:

He saw to the improvement of the UK segment’s underlying EBIT margin. By the end of 2013, the margin here had risen by 210 basis points to 2.2 percent compared to 0.1 percent in 2012. Through this, he helped set a solid foundation towards achieving the company’s 2015 goal of an underlying EBIT margin greater than 5 percent in the UK segment.

To achieve the above, he helped simplify the UK business by reducing retail stores by 21 percent from 1,101 before the start of the transformation program, to 874 stores by the end of 2013. Since the internet is now crucial in the travel industry, under Mr. Fankhauser’s leadership, the UK segment’s web penetration increased to 36 percent, up from 33 percent in 2012. He also oversaw the reduction of UK brands from 27 to 10.

Mr. Fankhauser also saw to it that year-on-year cost savings of £64 million was delivered, coupled with further savings of about £35 million.

When you consider that, according to the company, Mr. Fankhauser spent 80 percent of his time in charge of the UK and Continental Europe, then you’ll understand that he actually played a vital role in achieving the results discussed above.

So, with his success when in charge of the UK business, I believe that Thomas Cook is in the hands of someone who will carry on from where Ms Green left things.

Foolish takeaway

However, while I believe that Mr. Fankhauser has the ability to drive the company forward, I would say that investors should be a little cautious about this company for now. At the very least, investors should wait until trading updates for the current year come out of the company.

I say that in the light of revelations that Ms Green recently said to Management Today‘s ‘Inspiring Women’ conference that the turnaround was not yet complete. So for her to say her ‘job is done’ when stepping down does raise some questions about events going on inside the company.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

An important metric for AMP6

While the published top and bottom line figures are impressive, I believe that the focus should be on the operating efficiencies of these companies over the last five years as we move to the end of the current asset management plan (AMP) period.

The current period, AMP5 (2010-2015), has seen a shift of focus towards operating, maintaining and managing the assets and infrastructures that UK water companies have spent a lot on to improve since the privatisation of the UK water industry. So it means that we’re in stage where operating expenditures (opex) will rise.

For instance, it is estimated that the opex outlay for the current AMP5 period is around £19 billion compared with capex spend for £24 billion. And that figure is expected to rise during the AMP6 period. This means that water companies have to look for ways to cut costs and eliminate any inefficient processes to stay efficient. Companies that are able to successfully cut costs will be able to keep their customers happy through lower bills, and more importantly, realise the full benefit of previous capital investments. This could also make investors benefit through improved dividend payouts.

Improving operating efficiency

Having said that, let’s take a moment to assess if these companies have an effective operation regime in place that could help them benefit in the coming AMP6.

As stated in a recent report about preparing for AMP6, improved customer service is critical to operating efficiency. One way to assess this is by looking at customer complaints against these companies. Since the start of the current AMP5, both companies have seen their customer complaints drop. For instance, Severn Trent’s customer complaints have dropped from 2,045 in 2009/20010 to 1,011 in 2013/2014.

On the other hand, United Utilities’ complaints have dropped from 2729 in 2009/2010 to 1,114 in 2013/2014. It shows that both companies have been able to improve customer satisfaction over the past few years. One will appreciate these figures on considering that the industry at large saw a 35.3 percent decrease in complaints during the same period, while United Utilities and Severn Trent saw a decrease of 59.18 and 50.56 percent respectively.

If you’re wondering how this translates to better figures for these companies, here is an explanation. The reduction in customer complaints suggests that these companies have an effective inspection and maintenance regime in place. In general, it means that these companies are effective at handling events that bring about customer complaints that usually reduces productivity and at times increases unplanned costs, which ends up eating into the bottom line.

Overall, the improvement with customer satisfaction indicates that these two companies could be effective in operation enough to deal with the maintenance demands of the AMP6. This also presents an opportunity for investors.

Attractive dividends

In addition to the above discussion, their dividends are also attractive. United Utilities have increased final payout by 20 percent while Severn Trent have increased its own by 23.5 percent over the last four year, yielding 3.97 percent and 4.01 percent respectively. That trend has continued into the current year. For the first half of the current year, United Utilities raised payout by 4.6% while Severn Trent raised payout by 5.6% compared to the same period a year ago.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The downward trend can be effectively traced to the fact that company’s financial results have not been impressive in recent times. For instance, for the first nine month of the year, the company saw its US and Europe turnover drop by 9% and 7% at constant exchange rate respectively. The Chinese bribery scandal isn’t helping, either. However, I deem Glaxo undervalued. Here’s why.

Growing presence in emerging markets

While turnover from US and Europe decreased during the third quarter, Glaxo experienced a strong growth of 12% in emerging markets. Well, that didn’t just start this year. It’s been like that over the last few years. As of 2008, Emerging Markets and Asia-Pacific accounted for 16% of the company’s total turnover. However, by the end of 2013, this figure had grown to 25%.

You will appreciate this when you consider that between 2008 and 2013 its total turnover have increased by £2.1 billion. It shows that the increase didn’t come as a result of stagnant turnover. Moreover, the fact that Glaxo has topped the Access To Medicine Index for the fourth time this year confirms Glaxo’s presence in the emerging markets.

More growth on the horizon

Going into the future, Glaxo looks best positioned to be the winner in the emerging markets. First, according the International Monetary Fund, emerging economies are expected to grow two to three times more than developed countries. And if you were familiar with the factors that facilitate the growth of a company, you’d know that economic growth is one of them. With this in mind, as the emerging economies develop, a company like Glaxo with strong presence in these markets would see impressive growth.

Moreover, The Economist intelligence Unit projects that drug sales in China will reach $166 billion in 2017. At the minimum, Glaxo’s focus on emerging markets would position it to take a good portion of that projection. Indeed, it seems that’s already happening considering that the company experienced a 65% increase in sale in China during the third quarter.

One other positive about Glaxo is that it trades on a low P/E relative to close competitor AstraZeneca. Glaxo currently has a P/E of about 13 while AstraZeneca currently has a P/E of around 36.55, both based on 2013 results. So, at current levels, Glaxo presents value.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

This increase has made BATS expensive relative to the FTSE 100, with respect to its PE ratio. It currently has a PE ratio of about 18 compared to FTSE 100’s 14. However, despite being more expensive, it still offers some growth potentials for the long-term investor. Here are some areas to consider.

Global Drive Brands keep rising

Between 2009 and 2013, BATS’ volume dropped by about 6.6%. And it is likely that the trend will continue this year given that volume for the first nine months of 2014 declined by about 1.5 percent compared to the same period in 2013.

However, volume and market share in its Global Drive Brands have been growing impressively during the years in which total volume has been declining. The increase here is driven by entrance into new markets. For instance, Pall Mall has grown into more than 100 markets as of 2013 compared to 60+ in 2007. In addition, the company has added Rothmans to the group this year. This is helping the company grow its revenues amidst dropping volume. Indeed, the growth in this segment is bound to continue considering that the segment saw a 6.2 percent increase in volume for the first nine months of 2014 compared to the same period a year ago.

More profitable compared leading tobacco companies

While BATS is behind Philip Morris in terms of global market share, BATS has managed to be more profitable. It’s also more profitable than Imperial Tobacco Group and Japan Tobacco. For instance, it currently has a gross margin of 78.13 percent for the trailing 12-month period compared to 65.72 percent, 59.30 percent and 19.8 percent by Philip Morris, Japan Tobacco and Imperial Tobacco respectively, for the same period. And more impressively, there has been no time over the last four years that any of these competitors has managed a better gross margin than BATS.

This is driven by the fact that BATS focuses its marketing effort mostly on its Global Drive Brands. If the company continues with this model, it is likely that it will remain profitable going into the future.

Growth in emerging markets

With cigarette consumption dropping in Western Europe and the Americas, BATS has been shifting its focus to the emerging markets, especially Asia-Pacific. For instance, according to a Morningstar analyst, BATS gets about 82 percent of its volume and about 58 percent of its revenue from emerging markets. Indeed, the growth opportunity in these markets is huge. Here is why. As economy in these markets becomes better, consumers would have more disposable income to spend on things like cigarette. And in the end, a company with strong presence in such region, like BATS, stands to benefit immensely.

Being cautious

Truth be told, while the points I have discussed offer hope that BATS share price could rise over the long term, its high PE ratio, which is, by the way, higher than those of its mentioned competitors, suggests that there is not much room growth in theory. So investors with low risk appetite may rightly want to look somewhere else.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

All these events put together has ensured that BP share price has declined by about 9.6% year-to-date. This makes one ask: does this dip present a good entry point for an investment in BP?

For reasons discussed below, yes, the dip makes BP a good ‘buy’ candidate for me.

Delivering on promises

In 2011, the company said it would start working on a 10-point plan. For the most part, the company has been delivering on the promises in that 10-point plan. Here are a few that should interest dividend investors.

In the plan, the company highlighted its intention to grow operating cash flow by 50% by the end of 2014. You want to bear in mind that its operating cash flow at the end of 2011 was $22.2 billion. By the end of the third quarter, however, the company already has $25.5 billion in operating cash flow. And the company said it is confident of generating between $30 billion and $31 billion by the end of the year.

While that won’t exactly add up to a 50% increase, the progress so far is commendable. If for nothing else, the fact that the Deepwater Horizon lawsuit has taken a different direction since 2011 makes this commendable. Besides, considering that the company generated $7.9 billion and $9.8 billion in operating cash flow in the second and third quarter respectively, it is very likely that BP will actually meet up with the plan to ramp up operating cash flow by 50 percent.

Reduction of debts

It was also part of the 10-point plan to reduce the company’s gearing, or net debt ratio. In 2011, it said it aims to keep its gearing at the lower half of the 10-20% range over time. It would help to keep in mind that its gearing in 2007, 2008, 2009, 2010 and 2011 is 22.1%, 21.4%, 20.4%, 21.2% and 20.% respectively. So to say it aims to keep its gearing at the lower half of the 10-20% range is quite ambitious.

To management’s credit, though, the company’s gearing now stands at 15%, as of the end of the third quarter. There are two things to appreciate here. First, the reduction didn’t happen abruptly. The process was gradual between 2011 and now. This suggests that the company actually has a working plan for reducing its debts. And it further gives hope that the company will be able to keep gearing at the lower half of the 10-20% ratio. Second, that fact that the company is able to reduce this amidst servicing claims from the Deepwater Horizon disaster, which has cost the company about $42 billion so far, suggests that the company’s balance sheet is robust.

To keep the story short, the company has been delivering on the promises on the 10-point plan, for the most part. And shareholders are already seeing the rewards with the recent increase in dividends. One other metric that make BP a buy candidate is the fact that it currently trades below its net asset value. With that in mind, dividend yield could become higher than current levels in future.

But there is a downside

While the points above are encouraging, there is a risk that investors should be aware of. The company said in its third-quarter earnings call that “it is still not possible to reliably estimate the remaining liability for business economic loss claims”, regarding the Deepwater Horizon claims. And this is a genuine cause to worry given how the case constantly takes a fresh twist. Therefore, there are chances that the claim might end up affecting cash flow, a situation that could threaten dividends.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

This brings the question: is it a good time to buy Lloyds, even after spinning off to create a rival for itself? A close look into what’s happening in the company suggests that ‘yes’ is the answer. Here are two things to consider.

Effective execution of strategies

The Financial Stability Board, or FSB, recently announced its plan to push through a regulation that requires global systemically important banks, or G-SIBs, to hold enough capital in order to increase their loss-absorbing capacity.

According to Bank of England Governor Mark Carney, the new regulation could require G-SIBs to have a loss-absorbing capacity that is up to a quarter of their risk-weighted assets. This might end up affecting dividends of UK banks like Barclays, Standard Chartered, HSBC and Royal Bank of Scotland.

Fortunately, Lloyds’ investors don’t have to worry about this, as the company is no longer considered systematically important to global finance. And that’s exactly what Lloyds has been trying to do. The company is currently working on a Group Strategic Review that includes the reduction of the company’s international presence to focus on UK, Channel Islands and the UK Expat marketplace.

Therefore, that the company is no longer on that list shows that an effective strategy execution regime is in place at the company. To support that point, the company said in its third-quarter report that it has reduced its international presence to seven countries.

This generally indicates that management at the company is effective, a feature that helps companies stay profitable over the long term.

Capital efficiency

This surely ranks among the most underrated aspect of Lloyds. A look at the annual reports of recent years shows that the company is effective at managing costs. For instance in 2009, when the impact of financial crisis was still huge, the company was able to cut cost by 8%. By way of comparison, Barclays and RBS saw their costs rise by about 24% and 32% respectively that same year.

Moreover, that it’s reducing its international presence is only going to make it more cost efficient, which, in the end, should lead to increasing net interest margin.

In addition, with the company planning to resume dividend payments, its cost-efficient model will enable it to raise dividends easily to reward investors adequately. Therefore, there could be significant gains for investors over the long-term. Investors could even start reaping from the company’s cost effectiveness when it pays 65 percent of its profit as dividends in 2016.

But wait a minute

While it is good that the company has been effective at reducing its international presence, you need to bear in mind that this increases the risk of investing in the company. It means it is becoming less diversified and as such, its competition against TSB and other UK-centric banks will even be greater.

Therefore, while the effectiveness of Lloyds is positive for the future, you want to be sure that the company is well positioned to cope with the increased competition that the divesture brings by considering other factors.

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Craig Adeyanju has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.